Scandinavian Airline SAS Files For Bankruptcy In U.S., As Labor Unrest Adds To Air Travel Chaos

Scandinavian Airlines, better known as SAS — the flag carrier of Denmark, Norway, and Sweden — filed for Chapter 11 bankruptcy protection in the United States on Tuesday, one day after a thousand of its pilots called for a strike.

The airline is blaming the pilots union for service disruptions. “SAS will continue to serve its customers as normal, although the strike by SAS Scandinavia pilots’ unions will impact the flight schedule,” the airline said in a statement.

The airline is canceling more than half of its scheduled flights, adding to widespread travel disruptions already occurring across Europe. As of 8 a.m. Eastern Time on Tuesday, SAS had canceled 236 flights, a whopping 78% of its daily volume, according to FlightAware. In Norway, these include 21% of flights departing Oslo Gardermoen Airport; 16% leaving Tromso Airport, and 15% of flights departing Trondheim and Kristiansand airports.

MORE FROM FORBESThe Smart Traveler’s Survival Playbook For Summer Flight CancellationsBy Suzanne Rowan Kelleher

Stockholm-based SAS said filing for Chapter 11 will allow it to reorganize its finances under a program it is calling “SAS Forward,” noting that the business is in “well advanced discussions with a number of potential lenders” to obtain additional debtor-in-possession financing for up to $700 million to support its operations throughout this court-supervised process. Debtor-in possession financing is a specialized type of bridge financing for businesses that are restructuring through a Chapter 11 process.

“The ongoing strike has made an already challenging situation even tougher,” said Anko van der Werff, CEO of SAS, who urged the pilots’ unions to end their strike and “engage constructively as part of this process.”

In the larger picture, unrest among pilot and airline workers unions has become a worldwide issue, adding more chaos to an already fraught travel environment.

British Airways workers are preparing for a strike in the coming weeks over demands that a 10% pay cut implemented during the pandemic gets reversed. And in Spain, staff at the budget carrier Ryanair have announced they will be striking for 12 days in July in an effort to secure better work conditions.

In the United States, the pilot shortage has spurred a flurry of recent demonstrations and renegotiated contracts between carriers and pilot unions.

In late June, unhappy pilots at Southwest Airlines picketed the company’s headquarters in Dallas and near the entrance to Love Field Airport to demand a better union contract.

Also last month, more than 1,200 Delta Air Lines pilots and staff held demonstrations and picketed at major U.S. airports in Atlanta, Detroit, Los Angeles, Minneapolis, New York City, Salt Lake City and Seattle, calling for higher pay, among other demands.

Last week, American Airlines offered its pilots pay raises of nearly 17% in a new contract. The prior week, the United Airlines reached a tentative agreement with its pilots including pay increases of 14.5% within 18 months.